German utility giant E.ON, Europe's second leading player in the field, is to buy the majority stake of electricity distributor Electrica Moldova, in a deal worth 95-102 million euros, sources close to the deal told Ziarul Financiar.
As a result, Moldovan consumers will move from the Romanian State to the portfolio of the privately owned German giant that will provide electrical power and natural gas for this part of Romania.
The signing of the privatisation contract is expected to take place in February, the same time as the CEZ (Czech Republic)-Electrica Oltenia deal.
Sources say E.ON will pay 28-32 million euros for the acquisition of 24.62% in this branch and then contribute a further 67-73 million euros through a capital increase.
The decision by the German group to buy the electricity distribution and supply company in Moldova, one of Romania's poorest regions, was the result of the first step taken on the market in the autumn of 2004. Back then natural gas company Ruhrgas, a member of the E.ON Group, acquired 51% in Distrigaz Nord, a natural gas distributor that services the northern half of Romania - Transilvania and Moldova. The deal was worth 304 million euros.
E.ON's investment commitments in Romania now exceed 400 million euros, turning the company into one of the top investors on the domestic market. Analysts believe the takeover of Distrigaz Nord first justifies E.ON's choice of the electrical power distributor Electrica Moldova in view of a future integration of local operations on the natural gas and energy markets in line with the "multi utility" model developed in Western Germany. This involves having one company supply several utilities, like energy, gas and water, helping to optimise costs and having the same consumer target.
After signing the contract for Distrigaz Nord, the Germans reached the bid submission stage for Electrica Oltenia, Romania's largest electricity distributor and Electrica Moldova.
CEZ and E.ON bid for both electricity distributors, though without losing track of their strategic interest. The Czechs already owned energy distributors in Bulgaria and were preparing to buy energy generation facilities there.
On the other hand, E.ON has one of the strongest positions on the natural gas and energy markets in the Central and Eastern Europe, including Hungary, Romania's neighbour.
The German group initially probed the Romanian energy distribution market and considered the Electrica braches in the west of the country, showing potential interest in Electrica Banat, Electrica Transilvania Nord and Electrica Transilvania Sud in 2002.
The sale of Electrica Banat to the Italian company Enel resulted in E.ON taking its first step in Romania on the natural gas market instead of the energy market as analysts had expected.
adrian.mirsanu@zf.ro
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